Air force teams on Thursday recovered the bodies of President Mohammed Zia ul-Haq and the U.S. ambassador as investigators searched for clues to what caused Zia's military plane to explode.

Businesses were closed Thursday across the country as a three-day period of mourning began, and soldiers were posted at government buildings under a state of emergency declared by the head of a caretaker government, Ghulam Ishaq Khan.Air force investigators flew to the scene Thursday as unofficial reports and rumors circulated that Zia's American-made C-130 was sabotaged or shot down.

The remains of the plane lay strewn across a sandy plain near the Indian border in Punjab province. The plane exploded Wednesday after taking off from a nearby airport.

Soldiers slid the flag-draped coffins of Zia, U.S. Ambassador Arnold Raphel and 28 others onto planes bound for Islamabad and other Pakistani cities where relatives of the victims were waiting.

The government had originally put the death toll at 37.

Most of the wreckage lay in a 100-yard radius. A wing lying about 1,000 yards away was the only piece not charred and mangled when the turpo-prop aircraft fell to the ground shortly after takeoff from Bahawalpur airport.

Ishaq Khan said he could not rule out sabotage but was awaiting for a probe to be completed.

A Pakistani air force crash investigation team flew to the scene Thursday in search of the plane's flight recorder. A similar U.S. team was also expected, but no details were disclosed.

Unofficial reports and rumors circulated that the C-130 was hit by an anti-aircraft missile or a helicopter or was shot down by India.

The United News of India news agency Thursday quoted a "highly placed Pakistani military official" as saying a sophisticated time bomb may have caused the explosion.

It quoted the official, who was not identified by name, as saying the pilot did not radio any message to the control tower. He said the pilot probably would have had time to radio if the plane had been attacked by a missile.

Heavy security surrounded the crash site, which was covered with weeds and stagnant pools. The site is about eight miles northwest of the airport and 330 miles south of Islamabad.

An army brigadier who identified himself only as Zaidi said some witnesses reported seeing the plane explode shortly after takeoff, but others said it was only smoking when it lost altitude and crashed.

"If it burst in the air it would be spread over a large area, but it is all in one area," he said. But he said the far-flung wing was "a puzzle to investigators."

Businesses were shuttered in official mourning for Zia. It was not immediately clear what civil rights were curtailed by the state of emergency.

A funeral for Zia, a close U.S. ally, was set for Saturday. The U.S. Embassy said Secretary of State George P. Shultz would attend.

The people killed aboard the plane included U.S. defense adviser Brig. Gen. Herbert M. Wassom and five top Pakistani generals. The group had been inspecting a military unit near Bahawalpur.

The Indian border states of Jammu and Kashmir were placed under curfews Thursday after pro-Pakistanis tried to set two bridges ablaze. Indian news reports said three people were killed and nine wounded by security forces when a crowd defied the curfew.

Pakistan was created from Moslem-dominated areas of predominantly Hindu India when the subcontinent became independent of Britain in 1947. The two countries have fought three wars.

A U.S. official in Washington, speaking on condition of anonymity, said the United States will help Pakistan investigate the crash. "There is no confirmation of any foul play, but we are not taking anything for granted," the U.S. official said. "An incident like this arouses suspicion."

Zia allowed his country to be used as a staging ground for U.S.-backed guerrillas fighting Soviet and government troops in neighboring Afghanistan. Since the Soviet troop withdrawal began there May 15, the Kremlin has accused Pakistan of continuing to funnel arms to the insurgents.

"The Presidium of the Supreme Soviet of the USSR sent to the interim president of that country . . . our deepest condolences," Foreign Ministry spokesman Gennady I. Gerasimov announced at a news briefing.

Afghan Foreign Minister Abdul Wakil also expressed condolences but declined to speculate whether it could affect Islamabad's policy.

Rajiv Gandhi, India's prime minister, said he was "deeply shocked and distressed" by the death of Zia and sent condolences to the president's family. The Indian government declared three days of mourning for Zia.

Zia, 64, ruled Pakistan for 11 years, longest of anyone in the nation's 41-year history.

Ishaq Khan pledged to continue Zia's foreign policy of close ties with the United States and with fellow Moslem nations. He said he would proceed with Zia's vision of an Islamic society under a Moslem code of law.

There were no reports of major unrest.

World leaders expressed shock and sadness at Zia's death.

China, which has funneled funds and weapons to U.S.-backed Afghan rebels based in Pakistan, said Thursday Zia's death "deprived Pakistan of an outstanding leader and China (of) an old respected friend."